ISA account after April 2024

Walkinthewoods

I'm thinking of opening a new ISA account after April next year. I already have an ISA which is fixed until September 2024. Will I be able to amalgamate the two together if they are opened with two different companies? 

Ocelot

Why do you want to amalgamate them? If you do, you'd transfer out the existing fixed rate one into the new one you'd opened, but will have to pay an interest penalty.

If you just want two ISAs earning interest, all you need to do is open another one after April next year. You can have ISAs with as many companies as you like at any one time (although only 20k of new money per year).

Walkinthewoods

If I open a new ISA after April and put in the full 20k, what will happen to the maturing ISA in September. Will I be able to add it into the new 2024 ISA, then the total balance would add up to 40k.

refluxer

Walkinthewoods said:

If I open a new ISA after April and put in the full 20k, what will happen to the maturing ISA in September. Will I be able to add it into the new 2024 ISA, then the total balance would add up to 40k.

In September next year, you can choose to do whatever you like with the maturing ISA - whatever you choose do with those funds, transferring them to a new ISA won't count towards the 2024-25 tax year ISA allowance.

The chances are you won't be able to transfer into the ISA you take out next April though because, with just a few exceptions, most fixed rate ISAs have a limited funding window in which to transfer in other ISAs. There is, however, no limit to the number of cash ISAs you can open in any one tax year - the main limitation is that you can only pay new subscriptions from the current tax year into one cash ISA at any one time.

My advice would be to keep the two separate, anyway. Combining ISAs often causes more problems than it solves, particularly further down the line if you start to approach the FSCS limit.

Walkinthewoods

Thank you. How can I keep both ISA open? When the one matures in September, won't I have to take the money out and the account will close?

refluxer

Walkinthewoods said:

Thank you. How can I keep both ISA open? When the one matures in September, won't I have to take the money out and the account will close?

No - the provider should write to you in the month or so leading up to the maturity date with a list of options. If you want to retain the balance within an ISA, then you can simply arrange to transfer those funds to a new cash ISA. 

If you plan on moving to a new provider, then it's sensible to ensure that the fixed rate ISA matures into some kind of easy access or 'maturity' ISA from which you can then request a transfer via the new provider, without penalty.

Walkinthewoods

Last question! What would I do with the maturing ISA if I can get a better rate somewhere else but I have already opened a new ISA in April?

refluxer

Walkinthewoods said:

Last question! What would I do with the maturing ISA if I can get a better rate somewhere else but I have already opened a new ISA in April?

You can open as many cash ISAs as you like (with as many ISA providers as you like) for transferring ISA money from previous tax years. The fact that you've already opened one in April with your 2024-25 ISA allowance won't matter.

You will only be restricted with what you do with the 2024-25 tax years subscriptions during that tax year (these have to stay together) - that restriction doesn't apply to transfers involving old subscriptions from previous tax years. 

Walkinthewoods

Thanks again for all your help and expertise.

Albermarle

Walkinthewoods said:

Last question! What would I do with the maturing ISA if I can get a better rate somewhere else but I have already opened a new ISA in April?

You can open as many new ISA's as you like in a tax year but you can only put new money into one. Transferring into a new ISA from an old one is NOT adding new money .
Can I suggest you spend some time scrolling through the forum, as the questions you are asking have been asked numerous times before, so it is a good way to get up to speed on ISA rules and issues.

Milly2Molly

I do not really see what benefits have been given to us in the Autumn Statement